The EU's Quest for Financial Sovereignty: Breaking Free from Visa and Mastercard's Dominance
The European Union (EU) is on a mission to regain control over its financial destiny, but the path to independence from US-dominated payment systems is fraught with challenges. With billions of transactions occurring annually within the EU market, the bloc's heavy reliance on US-owned payment schemes has become a growing concern.
In 2023, Visa and Mastercard processed a staggering 4.7 trillion USD in payment volume across the EU. Shockingly, 13 out of 21 eurozone member states still rely exclusively on international card schemes, with US card brands monopolizing the international segment, handling a staggering 61% of euro-area card transactions.
The escalating tensions between the EU and the US have heightened fears that 450 million European citizens might be cut off from international financial infrastructures. This has brought Europe's dependency on US-financial systems back into the political spotlight.
The European Central Bank (ECB) has issued a stark warning: "If we lose control of our money, we lose control of our economic destiny. And we surrender a key attribute of sovereignty."
While EU institutions have not yet officially endorsed WERO, the European Payment Initiative (EPI) is a promising private-sector initiative. Launched in 2024 in Germany, WERO is the first digital wallet and instant person-to-person (P2P) payments circuit "made in Europe."
EPI's goal is ambitious: to make WERO a fully-fledged alternative to US-payment networks by 2027. Ludovic Francesconi, Chief Member and Strategy Officer at EPI, emphasizes the importance of WERO in completing Europe's payment sovereignty architecture.
However, the road to success is not without obstacles. Judith Arnal, a senior researcher, acknowledges the promise of WERO but also highlights the conditions it must meet to compete with Visa and Mastercard. These include cost-effectiveness for merchants, convenience for consumers, security against fraud, and proper dispute resolution systems.
Arnal also advises against anti-US rhetoric, suggesting that the EU should focus on building its own alternatives alongside US systems. The urgency of the situation is evident, as the EU's overreliance on foreign payment schemes remains a significant vulnerability.
Despite efforts like the Instant Payment Regulation (IPR) in 2024, the EU's financial sovereignty is still at risk. In 2025, 47% of the eurozone's card payment value passed through Visa and Mastercard, indicating a persistent dependency.
The EU's leaders in Brussels are now rushing to address this issue, recognizing the strategic importance of financial independence. The EU has adopted a layered approach to build strong European alternatives, combining EU-level policy and regulation with private-sector efforts.
One such initiative is the SEPA instant payments law, which requires eurozone banks to offer instant credit transfers within seconds at the same price as standard transfers. The TIPS instant payment system, operated by the ECB, provides a pan-European infrastructure for real-time payments in central bank money.
The Digital Euro, first announced in 2020, is another highly anticipated project that aims to create central bank-issued digital cash for everyday electronic payments. Cooperation with this project is seen as crucial for regaining sovereignty.
However, the EU's efforts face challenges. Francesconi highlights the strategic loss of autonomy, emphasizing the control over consumer data, advertising opportunities, and growth limits that the EU risks losing without a pan-European solution.
The EU's single market fragmentation, including in payment systems, could cost the bloc up to €500 billion in annual GDP. This non-interoperability undermines the EU's economic competitiveness and innovation potential.
WERO, as a private-sector project, aims to address these issues by offering interoperability, brand recognition, and acceptance across borders. By transforming instant account-to-account payments into an everyday solution, WERO has the potential to strengthen European competitiveness and resilience.
The impact on citizens is significant. The ECB has warned that, despite SEPA, payments are becoming more expensive, and costs for consumers and businesses continue to rise. Merchants across the eurozone spend approximately €3 billion annually in fees to accept debit card payments from foreign customers.
WERO's potential to change this dynamic is a crucial aspect of the EU's quest for financial sovereignty. As Francesconi emphasizes, WERO offers a transformative solution, making instant account-to-account payments accessible and convenient for consumers and merchants across borders.
